Norway is the world’s leader in use of zero-emission, fully electric vehicles (EVs). They have 100,000 EVs on the road, over 5% of Norway’s cars. Thirty-seven percent of the new cars purchased in Norway last year were EVs. Norway’s transportation minister anticipates that the number of EVs on the road will rise to 400,000 in 2020, and that the sale of fuel burning cars will end by 2025.
There’s a good reason for these trends—incentives. EVs are exempt from Norway’s value-added tax, which adds 50% to the cost of a new vehicle. They are also exempt from road tolls and tunnel and ferry charges. And they get free parking, free charging and the freedom to use bus lanes. These incentives have been so successful that Norwegian politicians are rolling them back. The value-added tax will soon be replaced by a subsidy, which may eventually be phased out. EV owners will have to start paying 50% of the state road charges in 2018, and local authorities are now free to curtail free parking, local tolls, and the use of bus lanes.
Norway isn’t the only place where EV sales are booming. There were over two million electric cars on the road by the end of last year. Here’s the world-wide trend.
How good are all-electric vehicles for the environment? Very. This video reports the results of a recent analysis by the Union of Concerned Scientists.
What about the price? The average price of a new car is $31,000. To be competitive, the cost of an EV must drop to between $25,000 and $35,000. A new Tesla costs $35,000 and a Chevy Bolt sells for $37,5000. The prices are dropping due to a combination of mass production and the decreasing cost of batteries. This analysis by Bloomberg New Energy Finance projects the future trends in the cost of battery electric vehicles (BEVs) in thousands of dollars (on the left) and the percentage of Americans willing to buy at those prices (on the right).
Currently, Americans can get a federal income tax credit of up to $7500 for purchasing an EV, but there are conditions. This chart summarizes the current status of federal and state incentives, some of which expired at the end of last year.
You may also be interested in reading: